Increasing The Profit Of Training

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Training departments are under more pressure than ever to show they are impacting the bottom line, but how do you prove it? Run training like a P&L! You have two options: increase training revenue, or decrease training expense. How has training impacted your company's bottom line this month/quarter?

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Increasing The Profit Of Training

  1. 2. <ul><li>Total corporate training spending fell 11% in 2008. </li></ul><ul><li>(Corporate Learning Factbook, 2009, Bersin & Associates) </li></ul>
  2. 3. <ul><li>At the same time, 73% have expanded their offerings. </li></ul><ul><li>(ASTD 2009 State of the Industry Report) </li></ul>Total corporate training spending fell 11% in 2008. (Corporate Learning Factbook, 2009, Bersin & Associates)
  3. 4. <ul><li>The number of employees to learning professionals rose from 227 to 253. </li></ul><ul><li>(ASTD 2009 State of the Industry Report) </li></ul>At the same time, 73% have expanded their offerings. (ASTD 2009 State of the Industry Report) Total corporate training spending fell 11% in 2008. (Corporate Learning Factbook, 2009, Bersin & Associates)
  4. 5. <ul><li>In down </li></ul><ul><li>economies, </li></ul><ul><li>Training and </li></ul><ul><li>Marketing tend </li></ul><ul><li>to be the first to be </li></ul>
  5. 6. <ul><li>Can you answer the </li></ul>“ How much has training helped the bottom line this month/quarter?” question:
  6. 7. <ul><li>Only one out of ten </li></ul><ul><li>Learning Executives </li></ul><ul><li>measure the dollar </li></ul><ul><li>impact of training </li></ul><ul><li>on the business. </li></ul><ul><li>(source: CLO Magazine, 8/20/2009) </li></ul>
  7. 8. The Options <ul><li>Increase Revenue </li></ul>1
  8. 9. The Options <ul><li>Decrease Expense </li></ul>2
  9. 10. Increase Revenue <ul><li>We know intuitively that training helps the bottom line. </li></ul>how do you prove it with a specific dollar amount?
  10. 11. <ul><li>What is the Goal of the Training? </li></ul>
  11. 12. The 6 Basic Training Goals Increased Production
  12. 13. The 6 Basic Training Goals Increased Production Increased Customer Satisfaction
  13. 14. The 6 Basic Training Goals Increased Production Increased Customer Satisfaction Decreased Error Rate
  14. 15. The 6 Basic Training Goals Increased Production Increased Customer Satisfaction Decreased Error Rate Decreased Onboarding Time
  15. 16. The 6 Basic Training Goals Increased Production Increased Customer Satisfaction Decreased Error Rate Decreased Onboarding Time Decreased Turnover
  16. 17. The 6 Basic Training Goals Increased Production Increased Customer Satisfaction Decreased Error Rate Decreased Onboarding Time Decreased Turnover Decreased Litigation/Claims
  17. 18. Step Two <ul><li>Isolate the Effects of Training </li></ul>
  18. 29. 77%
  19. 30. Final Impact … each program yields $2,584 in additional revenue over the first six weeks. Assuming the program is held once per month with an average of 8 employees…
  20. 31. <ul><li>Profit </li></ul>assumes that expenses remain relatively constant. Expenses are covered in a later presentation.
  21. 32. <ul><li>From here you can calculate a Benefit-Cost Ratio and arrive at an ROI. </li></ul>

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